The publication of the Fair Work Agency's (FWA) delivery plan for 2026 to 2027 provides an important indication of how labour market enforcement is set to evolve over the coming years.

The plan sets out priorities for 2026–27, including preparations for holiday pay enforcement, stronger intelligence-led regulation and clearer support to help employers understand and meet their obligations. For employers, the inclusion of holiday pay enforcement is particularly relevant, as it signals an area where compliance expectations may become more visible from 2027.

What the Fair Work Agency means for labour market enforcement

The FWA has identified five priorities for its first year: reducing compliance burdens, strengthening data and intelligence, increasing awareness, providing leadership and preparing for the transfer of additional enforcement responsibilities. These priorities suggest an agency designed to support compliance while taking a more coordinated approach to enforcement.

This is significant because the FWA is bringing together expertise and operational experience from several existing enforcement bodies. The ability to combine information, insights and intelligence from across those functions will lead to a more coordinated and targeted approach to enforcement. In particular, the very experienced National Minimum Wage (NMW) team will be joining FWA from April 2027 with their investigative skills.

For employers, this means compliance is becoming more than a question of responding to individual complaints. This points towards a more risk-based model, where data, sector trends and operational intelligence help shape enforcement activity.

Holiday pay enforcement from 2027: what employers should review

One of the most notable commitments within the delivery plan is the Agency's preparation for holiday pay enforcement from 2027. The FWA states that it is developing guidance, tools and processes to support compliance and prepare for future enforcement activity. Planned initiatives include a holiday pay calculator, an online payslip explainer and simplified guidance for employers and workers.

For many organisations, holiday pay has historically been viewed primarily as an employment tribunal risk. The introduction of a dedicated enforcement regime fundamentally changes that position and this should be considered in the context of not just financial risk, but also reputational risk.

Employers may wish to use the period before enforcement begins to review:

• Holiday pay calculations.
• Working time and overtime arrangements.
• Payroll processes and controls.
• Record keeping and supporting documentation.
• Areas where compliance relies heavily on manual intervention.
• Statutory payments.

In RSM’s experience of helping clients with holiday pay compliance, standard calculations within HR and payroll systems do not fully align with the correct calculation needed for the entire workforce. This is because the calculation is dependent on the contractual terms and the pay elements that each group of workers are entitled to. Employers therefore need to undertake a review to determine what calculation is required under legislation and then compare this to the functionality in their systems.

Organisations that identify and address issues now are likely to be better positioned when enforcement activity expands. This is particularly relevant where responsibility for compliance spans HR, payroll, employment tax and legal teams.

How the Fair Work Agency will use data to target compliance

Another clear theme running through the delivery plan is the use of technology to improve compliance. The FWA has committed to developing better digital services, simplified tools and more innovative ways of supporting employers and workers. It also plans to improve systems, explore AI-enabled solutions and automate elements of its operational processes.

Alongside this, the FWA aims to strengthen its intelligence capability by bringing together insight from predecessor organisations and building relationships with trade unions, employer bodies and academics. The Agency has also highlighted a focus on developing deeper sector-level intelligence in higher-risk areas such as social care and construction.

Employers should expect a more data-led approach to compliance, with regulators using information, trends and risk indicators to focus enforcement activity.

The Fair Work Agency’s role in future employment enforcement

Perhaps the most interesting aspect of the delivery plan is the emphasis on leadership and influence. The FWA plans to establish an Advisory Board and Audit and Risk Assurance Committee, with the Advisory Board expected to support thought leadership and future approaches to labour market enforcement. The first Fair Work Agency Assembly is planned for October 2026, while a three-year enforcement strategy is due to be published in April 2027.

This suggests the FWA wants to do more than enforce existing rules. It is positioning itself as a central voice in shaping future enforcement priorities, sharing insight and influencing labour market practice.

For employers, that means keeping an eye not only on enforcement developments but also on the broader policy direction emerging from the Agency over the next 12 months.

How RSM can help with fair pay and employment compliance

Employment compliance risks rarely sit within a single team. Issues relating to holiday pay, NMW, working time and workforce governance often span HR, payroll, employment tax and legal functions.

Our fair pay team made up of tax, legal and system specialists help organisations understand and manage these risks through compliance reviews, data analysis, process assessments and remediation support. By identifying potential areas of exposure early, employers can strengthen compliance frameworks and prepare for a future where labour market enforcement is increasingly joined-up, intelligence-led and data-driven.

To discuss this in more detail, get in touch with Charlie Barnes, Chris Robson or your usual RSM contact.

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